JOHANNESBURG (Reuters) -South Africa’s rand weakened on Friday against the U.S. dollar, which hovered near a five-month high as traders heavily scaled back bets for a slew of U.S. rate cuts this year.
At 1537 GMT, the rand traded at 18.9050 against the dollar, nearly 1% weaker than its previous close.
The dollar index was last trading up 0.66% against a basket of global currencies.
Recent U.S. economic data on the labour market and inflation have dialled back market expectations for a rate cut from the Federal Reserve in June.
“The geopolitical risks in the Middle East remain high, and this is spurring further demand for the dollar,” said Andre Cilliers, Currency Strategist at TreasuryONE.
There was some positive economic data this week to support the local currency, which has been battered by power cuts and political uncertainty ahead of a May election. South Africa’s mining and manufacturing output rose in February, and business confidence held steady at an improved level.
Domestic investor focus next week will be on March inflation and retail sales figures.
On the stock market, the Top-40 index closed up 0.2% while the broader all-share index closed nearly flat.
South Africa’s benchmark 2030 government bond was weaker, with the yield up 5.5 basis points to 10.745%.
(Reporting by Nellie Peyton and Bhargav Acharya, Editing by Tomasz Janowski and Angus MacSwan)
